WeMakePrice (WMP)'s attack against Coupang has escalated into a legal dispute. WMP said on June 16 that it recently reported Coupang to the Fair Trade Commission (FTC) on charges of violating the large-scale distribution business law and the fair trade law.
WMP claimed that Coupang engaged in unfair trading practices by using its dominant position in the market to hinder our company's price cuts and unfairly shifting the cost of discounting products to suppliers.
Since late April, WMP has been implementing a "low-cost compensation" system that will compensate twice the difference in case the cost of daily necessities is more expensive than Coupang. Since then, there have been cases in which major suppliers of daily necessities have stopped supplying goods and refused to provide promotional support, it claimed.
It is suspected that Coupang, which is on the verge of falling sales due to WMP's aggressive price cuts, has put undue pressure on commodity makers to stop their supply to WMP.
With the WMP's lowest price declaration, Coupang also lowered the prices of its goods, forcing suppliers to bear the loss of profits incurred from the price cut, WMP also notified to the FTC.
"After conducting our own investigation into the cause of the incident, we concluded that there were Coupang's unfair competition acts outside the current law and reported it to the FTC," a WMP official said.
It also claimed that Coupang in a market-dominating position violated the Fair Trade Act, which stipulates that an operator in its superior status should not interfere trading partners' business activities or force them to make exclusive deals by using its status.
The FTC is reportedly considering conducting an on-site investigation against Coupang.
"It is difficult to say anything because we have not yet been informed of any specific details regarding the FTC's report," a Coupang official said. "It is impossible due to our internal policy to pass on the cost of the discount to the suppliers."